The origin of the Usher of the Black Rod goes back to early fourteenth century England . Today, with no royal duties to perform, the Usher knocks on the doors of the House of Commons with the Black Rod at the start of Parliament to summon the members. The rod is a symbol for the authority of debate in the upper house.
We of The Black Rod have since 2005, adopted the symbol to knock some sense and the right questions into the heads of Legislators, pundits, and other opinion makers.

About Me

We are citizen journalists in Winnipeg. When not breaking exclusive stories, we analyze news coverage by the mainstream media and highlight bias, ignorance, incompetence, flawed logic, missed angles and, where warranted, good work. We serve as the only overall news monitors in the province of Manitoba. We do the same with politicians (who require even more monitoring.) EMAIL: black_rod_usher@yahoo.com

Sunday, September 30, 2012

Mayor Katz: Up to his neck in the quicksand of scandal and sinking fast.

Sam Katz, Mayor of Winnipeg, made the worst mistake of his political life last week.

Instead
of stifling suspicions over the odd circumstances of his purchase of a
house in Phoenix, Arizona, Katz managed, with a disingenuous answer to
a simple question, to stoke the mystery to new heights. Ooooh, so
not good.

Confronted
by aggressive reporters, Katz was peppered with questions about how
he came to be buying a house at a discount from the sister of the Chief
Finance Officer of Shindico Realty, the company at the heart of not
one, but two, audits of how the city conducts its real estate business
and whether Shindico gets preferential treatment.

Visibly
nervous, he dismissed any suggestions of impropriety, often with a
prepackaged answer: "I purchased a home in Arizona. I paid fair market
value." The scrum running out of steam, one reporter threw out a
softball question. When did the mayor buy the house?

"I purchased a home in Arizona. I paid fair market value." said Katz, avoiding the question.

Now why would the mayor be ducking such a simple question? It makes you wonder. Or, as Columbo would say, "Just one more thing, Mr. Mayor..."

Taking a broad overview of the known facts, we have...

*
A woman living in Colorado buys a newly built house in a suburb of
Phoenix, Arizona in October, 2008, for $1.5 million. Cash, no mortgage.
Her husband signs off on any financial interest in the house, which,
we repeat, sold for $1.5 million. Isn't that what husbands do? Turn a
blind eye to the wild purchases their wives make without checking the
Visa bill item by item? Yeah, sure.

*
The woman fills out an affidavit where she swears to a notary public
that the house will "be occupied by (the) owner or family member."

*
But the very next year, a man who is not her husband is listed in the
city directory as living in the house, a man who has an ex-wife living about 15 blocks
away.

* And by 2011 the tax bill is sent, not to her husband's home, but
to the home of the other man in Winnipeg, so that he, presumably, will
pay it even though it's in her name.

*
Four years after buying the house, the woman from Colorado accepts $10
from the man in Winnipeg and transfers ownership of the Phoenix house
to him for that "and other valuable consideration." The deed is
recorded as "payment in full."

Oh, no, nothing suspicious here, Lt. Columbo.

Well ... maybe
that part about when the man in question, Sam Katz, Mayor of Winnipeg,
actually paid for the house and why he's being so evasive about it.

Katz
told reporters he paid a million dollars for the Phoenix house. Asked
where he got so much money to buy a house without resorting to a
mortgage, Katz said he was a self-made millionaire who raked it in when
he sold his Winnipeg businesses, apartment blocks, and other
investments after being elected as mayor. He presumably meant in 2006,
not the byelection in 2004.

So
Katz was sitting on a mountain of money, slightly dented following his
divorce from his first wife, Baillie, in early 2007. And sometime
during the next five years he decided to drop a million smackers cash
on a house in Phoenix, a house that somebody else also bought for cash.

Honestly?

A
professional cynic like Columbo might look at the timeline and ask
whether the woman in Colorado was acting as a cutout to buy the house
for Sam Katz without leaving a paper trail with his name on it. The
fact that she is the sister of the wife of Sam Katz's business partner
in the Winnipeg Goldeyes ballpark doesn't do anything to dampen suspicion.

And
speaking of suspicion, million dollar cash purchases in the United
States often attract the attention of police agencies whose job it is to
track money laundering or illicit asset transfers. Especially if there
appears to be an effort to avoid leaving a paper trail by the
principals.

Luckily
there's no hint of money laundering or illicit asset transfer in
Katz's purchase of a house in Phoenix, although the lengths to avoid a
paper trail might require some explanation.

Just
as the claim that the Phoenix house would be occupied by the buyer or a
relative might require some explanation. Given that Katz is not a
relative, if he was the sole occupant, then the claim on the notarized
buyers' affidavit might be seen as perjury. But that wouldn't involve
Katz except peripherally, as a witness against his partner's
sister-in-law.

Not that the mayor needs more embarassment.

Katz
was mortified at Thursday's session of city council when he was forced
to stand and vote in favour of a motion from Councillor Jenny Gerbasi
-- calling for a thorough audit of the city's real estate dealings
starting with the past five years, and extending to ten if the auditors
choose. The vote was unanimous and Katz would have looked the right
fool if he hadn't joined the 'aye side.

The
shamed mayor knew, if reporters didn't, this was sweet revenge by
Gerbasi for an insult Katz hurled against her in 2008 when he was
pushing the city to hire his best friend Phil Sheegl as Winnipeg's
chief operating officer, effectively the most powerful job in the city
with more power to hire and fire and negotiate contracts than even the
mayor holds.

Gerbasi questioned Sheegl's qualifications, leading an exasperated Katz to sneer,

"When
it comes to ability, intelligence and integrity, Coun. Gerbasi
wouldn't even qualify to be in the same building, let alone the same
room, as Phil Sheegl."

Thursday,
a humbled Katz had to grovel before Gerbasi and support her motion,
which everyone knows paints a bullseye on Sheegl. Sheegl himself sat
frozen behind his benefactor, knowing full well that his remaining time
at city hall is probably measured in months, not years.

Sam Katz's personal credibility is in shreds. Like Humpty Dumpty he will never be put together again and everyone knows it.

He
tried for a month to control the scandal swirling around him, then to
distance himself from it, and finally to pretend he's leading the
charge to get to the bottom of it. Nobody's buying a word.

How could they?

Katz
was nonplussed when CBC broke a story Aug. 23 that Shindico Realty
had a city property, a dis-used fire hall, up for lease---even though
the site has never been declared surplus. It wasn't the first time
Shindico put a city property on the market before it was declared
surplus and suspicion was raised that maybe Shindico owner and Katz
friend Sandy Shindleman was getting a gentle assist in business from
somebody on the inside. Hint hint.

Nobody at city hall seemed perturbed. The listing was pulled; Shindleman said it had been up in error.

Winnipeg's
property director Barry Thorgrimson said the land was "technically"
surplus anyway because the firehall on it had already been replaced.
The Fire Chief revealed the land was part of a land swap he had
personally negotiated with Shindico in exchange for some land Shindico
owned on which a fire station in River Heights had been built.

Say what?
City councillors began asking about this other firehall and discovered
an unknown Shindico connection to the construction of all four new fire
stations dating back to 2010.

Katz
jumped in then with his own take. Everybody, he said, knew that two
of the fire stations that had been replaced were going to be declared
surplus. So what was the big deal?

It
seems the deal was that the city built a firehall (Fire Station #12 to be precise) on
land it didn't own, the land swap had been a secret from city
councillors, and nobody was sure that the value of the land we were
giving Shindico was equal to the land under the fire station. And the
contract to Shindico was untendered. And had been structured to keep
city councillors from knowing who the contractor was.

Oh.

Katz
rushed to get ahead of the steamroller. He went on CJOB and disowned
Sandy Shindleman, declaring he hardly knew the man who just happened to
own some shares in the Goldeyes. And, he said, he wasn't happy with the
land-swapping fire chief, either. He deserved a good fingerwagging.

Then,
on Aug. 31, Katz's handpicked CAO joined five other city bureaucrats
in an unprecedented news conference to declare everything about the
firehalls was on the up and up. And city councillors should zip it
because he, the mighty Phil, would tell them what they needed to know,
maybe in September, maybe in October.

By coincidence this is the very day Katz took ownership of the house
in Phoenix. Did he know something nobody else in Winnipeg did?

When,
in early September, Jenny Gerbasi called for an audit of the real
estate division going back at least three years, Katz declared nothing
of the kind was warranted.

Instead,
he announced a review of the land swap would be conducted by, guess
who, Phil Sheegl and the city's financial officer, Mike Ruta, two of the
bureaucrats who had already cleared the department of wrongdoing at
the strange gang-newser.

There's a story about that "review" we haven't been told yet.

But
before it could be presented to city council, leaks out of city hall
revealed that it was being scrapped and in its place the city auditor
was launching his own audit of the firehall construction and land swaps.

The
mayor, still leading from behind, rushed to announce that he was fully
in agreement with an official audit rather than the whitewash review he
was expecting.

But
by then, nobody was listening to anything he had to say. They were
talking about the news that back in February Phil Sheegl had sold Katz
one of his defunct companies in Phoenix for one dollar.

Problem
was, as the mayor himself said, it would have cost him $3000 or $4000
to hire a lawyer and set up a company on his own. So, in effect, he got
a $4000 financial benefit for $1 from his best friend Phil Sheegl, the
man he assigned to examine how his other friend Sandy Shindleman got a
sweetheart deal on the firehalls contracts.

And then, this
latest news. Sandy's wife's sister bought a house for $1.5 million in
2008 and turned it over to Sam Katz in August for $10. Cash. No
realtor. The bare minimum paper trail.